Another blog for the boffins who are interested in why Australia’s unemployment is so low. In large part, it’s due to stopping immigration.
Obviously, the historic size of the Australian government’s fiscal stimulus and the Reserve Bank’s ultra-loose monetary policy, had a massive impact on the economy and the labour market.
The economy could not have survived without that stimulus.
But the decision to close Australia’s international borders has had a massive impact on the labour market. Employers had to hire ‘locals’.
When Australia’s borders closed in early 2020, net migration turned negative for the first time since 1946.
That date is significant because that was the year in which Australia’s modern mass-immigration program began under Labour Prime Minister Ben Chifley.
Between 1945 and 1960, Australia’s population expanded from 7 million to 10.3 million (an increase of 47 per cent in 15 years).
High immigration and the government’s dedication to maintaining full employment, underpinned Australia’s economic growth over the three decades from World War II.
Ever since then, high immigration and especially since the Howard Government, has played a key role in Australia’s economic growth and prosperity.
It has caused issues in the labour market though, especially low wages and hidden unemployment and under employment.
When Australia closed its borders in 2020, and overseas migration fell for the first time in nearly 75 years, it had major impact on the country’s economy.
It drove the unemployment rate down.
That’s why it’s a good idea to start applying for jobs now before they throw the immigration gates open.